Marketing Strategy and Competitive Positioning pdf ebook

Figure 6.3
Competitive 
positioning
Resource-
based view of
the firm
Target markets
Competitive advantage
Competitive 
positioning
Market
orientation

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THE RESOURCE-BASED VIEW OF THE FIRM
However, to assume that these are the only strategies, or that they are mutually exclusive, 
is somewhat limited.
Notwithstanding this limitation in perspective, the RBV offers a number of useful 
insights into the nature of corporate resources. There are a number of different views of 
how to define and classify resources:
● 
anything that can be thought of as a strength or weakness of a firm (Wernerfelt, 1984);
● 
stocks of available factors that are owned or controlled by the firm (Amit and Shoe-
maker, 1993);
● 
a bundle of assets, capabilities, organisational processes, firm attributes, information 
and knowledge (Barney, 1991).
However, one particularly useful framework for marketing purposes was proposed 
by Day (1994) in distinguishing between a company’s assets and its capabilities. In Day’s 
terms, organisational assets are the endowments a business has accumulated, such as those 
resulting from investments in scale, plant, location and brand equity, while capabilities 
reflect the synergy between these assets and enable them to be deployed to the company’s 
advantage. In these terms, capabilities are complex bundles of skills and collective learn-
ing, which ensure the superior coordination of functional activities through organisational 
processes.
In essence, the RBV places central emphasis on the role of assets and capabilities in creat-
ing competitive advantage. The theory recognises that resources are heterogeneous across 
firms and that there are barriers to acquisition or imitation that can provide individual firms 
with ways of defending the advantage created in the short to medium term. Sustainable 
competitive advantage, the theory suggests, lies in the possession of resources that exhibit 
certain characteristics: value, rarity, inimitability and non-substitutability (VRIN).
Barriers to imitation, referred to in the literature as isolating mechanisms, include causal 
ambiguity (difficulty in identifying how an advantage was created), complexity (arising 
from the interplay of multiple resources), tacitness (intangible skills and knowledge result-
ing from learning and doing), path dependency (the need to pass through critical time-
dependent stages to create the advantage), economics (the cost of imitation) and legal 
barriers (such as property rights and patents) (Lippman and Rumelt, 1982; Dierickx and 
Cool, 1989; Reed and DeFillippi, 1990; Hooley et al., 2005).
A major criticism of the RBV, however, has been that it neglects the influence of 
market dynamism (Priem and Butler, 2001; Wang and Ahmed, 2007). The more rapidly 
markets change, the more there is a need for firms to renew their resources and develop 
new capabilities (Ambrosini, Bowman and Collier, 2009). This notion has been explored 
further in organisational research into flexibility (Rudd et al., 2008), adaptation and 
adaptability, and also dynamic capabilities. The latter is discussed more fully in the fol-
lowing section.
6.3.2 Dynamic capabilities
In response to the concerns mentioned previously, recent research broadly in the RBV tra-
dition has focused on dynamic capabilities (see Teece, Pisano and Shuen, 1997; Bowman 
and Ambrosini, 2003; Ambrosini and Bowman, 2009). For a review of the field of dynamic 
capabilities, see the special issue of British Journal of Management edited by Easterby-
Smith, Lyles and Peteraf (2009).
Dynamic capabilities are defined as ‘the capacity of an organisation to purposefully cre-
ate, extend, or modify its resource base’ (Helfat et al., 2007).
This view recognises that as markets change and become more globally integrated, new 
forms of competition emerge and new technologies are employed and firms cannot rest 
on their existing capabilities alone (Winter, 2003; Wang and Ahmed, 2007). Firms need 
to actively seek to recreate themselves through extending and modifying their operations.

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